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Phase III auction: 60 rounds of bidding completed so far

At the close of Day 15 of bidding, 91 channels in 56 cities became provisional winning channels with cumulative provisional winning price of about Rs 1,079 crore

BestMediaInfo Bureau | Delhi | August 17, 2015

radio-station-fm

E-auction for the first batch of private FM radio Phase III channels saw the completion of 60 rounds of bidding at the end of Day 15 on August 14, 2015. Four rounds of bidding are held daily.

At the close of the 15th day of bidding, 91 channels in 56 cities became provisional winning channels with cumulative provisional winning price of about Rs 1,079 crore, against their aggregate reserve price of about Rs 449 crore. The total reserve price of the first batch of 135 channels is Rs 550.18 crore.

The first batch auction will pave the way for onset of FM Phase III regime, which will bestow many new facilities on the operators under the regime. In Phase III, license will be for 15 years, as against 10 years in Phase II. Total FDI/ FII allowed in new regime is 26 per cent, compared to 20 per cent in Phase II. An operator in Phase III regime may own up to 40 per cent of the channels in the same city subject to three different operators in the city, whereas earlier policy provided for only one channel per operator per city. New regime also gives an operator facility to network its own channels within the country. Unlike Phase II, Phase III regime permits the operators to carry the news bulletins of All India Radio in unaltered form on mutually agreed terms and conditions with Prasar Bharati.

As the Government has rejuvenated its approach towards the North Eastern part of India with its ‘Act East’ policy, FM Phase III policy also exudes this sentiment. It provides much needed support to the FM radio broadcasting services in cities of North Eastern part of India as in the cities of Jammu & Kashmir and Island territories, with provision of annual fee of the channels in these areas at half the rates for first three years, besides Prasar Bharati infrastructure at half the lease rentals.

As is known, during the Ninth Five Year Plan, the Government of India adopted a policy for improving variety of content and quality of radio broadcasting. The thrust areas for radio broadcasting were on improvement of programme content, providing wider choice of programmes, improving broadcast quality and enhancing technical features. With this vision, FM Phase I was launched in 1999-2000, after which 21 private FM channels became operational in 12 cities. The Government introduced Phase II for FM radio broadcasting vide its policy notification dated July 13, 2005. After FM Phase II, there are 243 FM channels in operation in 86 cities.

Due to exponential growth of the FM radio industry and demand for further expansion and to cover cities with population of more than one lakh through private agencies, the Government notified FM Phase III policy guidelines on July 25, 2011. Subsequently, it consulted the Telecom Regulatory Authority of India (TRAI) to give its recommendations on migration of existing Phase II licensees to Phase III. After government approval dated January 16, 2015 on TRAI recommendations, the Government notified the migration policy on January 21, 2015 for migration to Phase III.

Earlier, the Government had appointed an Independent External Monitor in consultation with the Central Vigilance Commission to oversee the entire process of FM Phase III rollout, including the e-auctions.

For allocating FM Phase III channels, the Simultaneous Multiple Round Ascending (SMRA) e-Auction methodology has been adopted, which is the same model being used by the Department of Telecommunications (DoT) for its spectrum auctions since 2010. Through global bidding, an independent external agency, C1 India, has been selected for SMRA e-auction of FM Phase III.

Government issued the Information Memorandum (IM) on January 21, 2015 as per Cabinet approval dated January 16, 2015 for the first batch of 135 channels in 69 cities under Phase III and also held a pre-bid conference with all stakeholders on January 28, 2015. The Government received 85 queries and suggestion in this pre-bid and all queries were duly replied on February 17, 2015. The Government also accepted some of industry’s suggestions, prominent among them being the display of aggregate and excess demand, auction closure rule as per DoT’s auctions, relaxation in cut-off date for determining the net worth of an applicant company, identification of all possible frequencies for 135 channels.

The Government then issued the Notice Inviting Applications (NIA) after incorporating suggestions accepted on IM for bidding for the first batch on March 2, 2015, which was followed by another pre-bid conference with prospective bidders on March 10, 2015. The Government received 76 queries in this conference and again all queries were duly replied, followed by an amendment to NIA on March 20, 2015.

After receiving 28 applications by the cut-off date of March 27, 2015, the Government published the ownership details of all the applicants, which were then complied by the bidders. To create awareness for the bidders, the Government conducted a training session on April 22, 2015, which was attended by all stakeholders.

An Application Review Committee (ARC) appointed by the Government with representatives from the Ministry of Law, Corporate Affairs, Finance, and Communications and IT, examined all the 28 applications.

After releasing list of pre-qualified bidders and including bidders as per the orders of the Madras and Delhi High Courts, there are 26 applicants for the first batch of FM Phase III. The Government conducted another training session on July 17, 2015 with all the eligible bidders, followed by mock auctions for three days from July 22 to 24.

List of cities and clock round price at end of Day 15 of the e-auction:

Daily_Auction_Public_Report_at_the_End_of_Day-15 Click on the image to enlarge.

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